HS2 Birmingham Extension Estimated to Cost £65 Billion, According to Railway Chief

The cost of constructing the high-speed railway HS2 from London to Birmingham could exceed £65 billion, according to the project's chief, Sir Jonathan Thompson.

He attributes this cost increase to a rise in the prices of materials like concrete and steel, which have potentially added between £8 and £10 billion to the original estimates.

Recently, the government canceled HS2 extensions to Manchester and the East Midlands, and there are ongoing disagreements with HS2 Ltd over the remaining construction costs.

The latest company estimates for the London to Birmingham section range from £49 billion to £56.6 billion at 2019 prices, whereas the government expects costs at the lower spectrum of £45 billion to £54 billion, not considering the latest revisions.

Sir Jonathan has expressed skepticism about meeting the government's lower cost target, especially considering the inclusion of a new station at Euston, which the government believes could be a point for savings.

He criticized the original budget as being too low and pointed out that extraordinary inflation within the construction sector in recent years has further driven costs up.

Labour has blamed the government's poor management under Prime Minister Rishi Sunak for the escalating costs, accusing the leadership of disregarding the use of public funds.

HS2's executive chair acknowledged that cost overruns over the past decade were caused by inaccurate cost estimates, project scope changes, and the impacts of both inflation and the Covid pandemic, which added an estimated £500 to £600 million more.

Delays in the project have increased costs, and the trains are expected to travel more slowly on certain tracks compared to existing ones. Moreover, HS2 trains will offer fewer seats north of Birmingham after the abandonment of the Manchester and Crewe segments.

While the Euston terminal's development depends on private investment, with housing plans surrounding the station, the area has already seen businesses and residents displaced for the station.

Until the new Euston station is built, travelers will reach London's core via Old Oak Common, transferring trains to do so. The government remains open to developers' proposals, though Transportation Secretary Mark Harper has avoided setting firm deadlines or financial commitments for the tunnel between Old Oak Common and Euston, suggesting the government seeks the best deal for taxpayers.

Work on Euston station is currently paused as an affordable design is sought, and the government is considering selling back land no longer needed for the project. However, the government has not provided a swift timeline for these sales, aiming for a thoughtful and measured approach.